Question
Narly Skateboards manufactures four different product lines: Base, Long, Trick and Special. Considerable market demand exists for all models. The following per unit data apply:
Narly Skateboards manufactures four different product lines: Base, Long, Trick and Special. Considerable market demand exists for all models. The following per unit data apply:
$ Base Long Thick Spec
Selling 110 120 140 160
DirectM 18 8 12 15
Direct L 12 20 32 36 42
Variable sup cost 4 12 14 20 24
Fixed sup cost 15 10 24 32
The fixed support costs were allocated based on the budgeted volume of 10.000 units of each model per quarter.
a-) If a machine breakdown makes machine time a constraint, using traditional concepts of Limiting Factor Decisions, which model is the most profitable to produce, in order to maximise the total net profit?
Long Model
Trick Model
Special Model
Base Model
Which of the following statements regarding the theory of constraints (is)are correct?
It assumes that all machines should operate at full capacity to avoid idle time
It uses a sequence of focusing steps to overcome a single bottleneck, after wich the improvement process is complete
One of the activities that could improve the throughput accounting ratio is increase the level of inventory to prevent stock-outs
It focuses on identifying stages of congestion in a process when production arrives more quickly than the next stage can handle
Use the Theory of Constraints (Throughput Accounting) and assume that machine time is the bottleneck. In this case, which model is the most profitable to produce?
Long Model
Trick Model
Special Model
Base Model
Assume that machine capacity is now restricted to only 100.000 hours per quarter. What are the throughput accounting ratio (TPAR) for the Base Model?
(round to the first decimal place)
If there is excess capacity, which model is the most profitable to produce?
Long Model
Trick Model
Special Model
Base Model
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